Magma, HDI-Gerling form insurance JV

ET Bureau|

Jul 29, 2009, 02.24 AM IST

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KOLKATA: Magma Fincorp is foraying into insurance business. The company has just inked an agreement with German insurance major HDI-Gerling International Holding to enter the general insurance sector in India. The new JV plans to seek the necessary Insurance Regulatory & Development Authority (IRDA) and the Reserve Bank of India (RBI) approvals soon.

Incidentally, HDI-Gerling International is part of the Talanx Group ���the third-biggest primary insurance group in Germany ��� with a product range extending across automotive insurance for private individuals, property and casualty segments and complex risks in industrial business.

The new joint venture, Magma HDI General Insurance Company will have an initial paid-up equity capital of Rs 110 crore. Headquartered in Kolkata, the JV company will leverage on the strengths of the two companies to offer general insurance products through Magma���s existing strong distribution and service network spread across rural India.

Speaking to mediapersons after signing the agreement with HDI-Gerling, Magma Fincorp vice-chairman & managing director Sanjay Chamria said: ���While Magma Fincorp and its promoters will collec-tively hold about 74% of the company���s total paid-up capital, our German partners will hold the balance 26%.���

As and when the gov-ernment allows 49% foreign direct investment in the insurance sector, HDI-Gerling International may increase their holding to 49%.

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